Florida Voters Approve Two Property Tax-Related Constitutional Amendments

Florida voters approved two amendments to the Florida Constitution that appeared on the November 3, 2020 general election ballot. These amendments expand existing homestead property tax relief for surviving spouses of veterans with permanent combat-related disabilities and for portability of the general homestead exemption benefit.  A third amendment, not directly tax-related but with implications for all future voter-approved constitutional amendments, did not pass.

Amendment 6 (HJR 877): Surviving Spouses of Combat Veterans              

This amendment provides that the homestead exemption for veterans with permanent combat-related disabilities carries over to his or her surviving spouse under certain conditions. The amendment is effective January 1, 2021 and applies beginning with the 2021 tax year. Voters approved the amendment overwhelmingly, with almost 90% voting in favor.

Under current law, honorably discharged combat veterans aged 65 and older who are partially or totally permanently disabled as a result of a combat-related disability are eligible for a discount from the amount of ad valorem tax otherwise owed on their homestead property. The percentage discount is the veteran’s percentage of permanent, service-connected disability as determined by the U.S. Department of Veteran Affairs.[1]  

Amendment 6 provides that, if a veteran receiving the discount predeceases his or her spouse and the surviving spouse holds legal or equitable title to the homestead property and resides there permanently, the discount carries over to the surviving spouse until he or she either remarries or sells (or otherwise disposes of) the homestead property. If the surviving spouse sells or otherwise disposes of the homestead property, the dollar amount of the discount may be transferred (or “ported”) to his or her new homestead property (absent remarriage).

Amendment 5 (HJR 369): Save Our Homes Benefit

Amendment 5 increases from 2 to 3 years the period of time within which Save Our Homes benefits may be transferred from a prior homestead property to a new homestead property (i.e., portability). This amendment is also effective January 1, 2021 and applies beginning with the 2021 tax year. Amendment 5 passed by a wide margin, approved by nearly 75% of voters.

Under current law, a person who establishes a new homestead property and received the homestead property tax exemption as of January 1 of either of the two immediately preceding years on a former homestead property is entitled to transfer (or “port”) that former homestead tax benefit to the new homestead property (subject to certain limitations). This may result in the new homestead property being assessed at less than just value.[2]  Amendment 5 extends the portability period to receipt of the exemption on the former homestead property during one of the prior three tax years, allowing homeowners greater flexibility for establishing a new homestead property.

Amendment 4: Voter Approval of Constitutional Amendments (Did Not Pass)

This proposed amendment would have required all future proposed amendments to or revisions of the state constitution to be approved by a super-majority of voters in two consecutive elections, instead of the current one, in order to take effect. Amendment 4 fell well short of the needed 60% approval from voters, netting less than 48% of the vote.[3]

Amendment 4 would have been significant to Florida taxpayers because numerous tax-related constitutional amendments have been approved by voters in the past through this process. Amendment 4 would have applied not only to citizen initiatives, but also to proposed constitutional amendments places on the ballot by the Legislature, the tax and budget reform commission, and the constitution revision commission. Given the poor showing of Amendment 4 on the ballot, it remains to be seen whether similar efforts will be pursued in the future.

Conclusion

State and local tax laws and requirements are constantly changing. Be sure you stay in compliance. Please let our State and Local Tax Team know if we can assist you in developing your state and local tax compliance program.

About the Author:

Mark E. Holcomb has 35 years of experience practicing in state and local taxation. He represents clients before the Florida Department of Revenue and local taxing authorities, and in litigation at the trial and appellate levels. Mr. Holcomb advises clients on a broad range of state and local taxes, in tax controversy work and in planning opportunities. He may be reached at mholcomb@www.deanmead.com.

[1] Art. VII, §6(e), Fla. Const.

[2] Art. VII, §4(d)(8), Fla. Const.

[3] Art. IX, §§5 and 7, Fla. Const.